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The rise of e-commerce and other forms of online shopping paved the way for businesses to find ways to ship goods at a faster rate than their competitors.
However, this pursuit puts pressure on companies as they have to deal with logistics and protect their business against costs arising from loss or damage while their goods are in transit. But don’t worry—the right insurance policy can help ease the pressures of cargo shipping.
As a business owner, it’s important to distinguish the kinds of insurance that are available to you in order to ensure you get the most suitable coverage for your needs. In this article, we’ll focus on two types of policies: commercial trucking insurance and cargo insurance.
But what do these policies mean? What do they cover? We’ll dive into that and more below.
Cargo Insurance: What You Need to Know
Cargo insurance is a type of specialized policy that protects you from costs if your cargo gets damaged or lost in transit. This includes coverage for any external cause during shipping, whether it’s by land, air, or sea. Aside from this, cargo insurance can protect you from a wide range of maritime shipping risks, such as theft.
Several types of cargo insurance policies may be available to you. However, it’s important to consult with a reputable insurance broker that can explain which policies apply to your business specifically.
Some cargo insurance policies include the following:
1. All-Risk Insurance Coverage
This type of cargo insurance covers physical damage or loss of shipment from external causes. This can include stranding (a situation where the ship manages to escape an accident but ends up stuck in a shallow region of sand somewhere), sinking of a ship, burning, theft, or colliding with another cargo vessel.
2. Free of Particular Average (FPA)
Also called named perils insurance, FPA is a type of marine insurance policy that covers a partial loss sustained by the cargo or the vessel—which means it’s only limited to certain instances “named” in your policy. Unless the ship is destroyed entirely, sinks, burns, collides with another vessel, or gets stranded, the coverage won’t help pay for the losses.
For instance, if the cargo’s container takes in water during a storm and the goods end up being destroyed, FPA insurance will not cover the loss.
3. Shipment-By-Shipment
This policy covers a single shipment at a time, and may be more expensive than other types of cargo insurance. However, if you don’t export your goods often, shipment-by-shipment insurance could be more beneficial to you in the long run.
When Do You Need Cargo Insurance?
Although it’s not required by law, it is advisable to get cargo insurance for your goods since their journey to customers exposes the shipment to many risks and hazards. External factors could also affect your business transactions, such as weather conditions or theft.
Additionally, even if the commercial carrier is legally liable for damages, their limit is typically lower than the value of the cargo they’re shipping.
Commercial Trucking Insurance: What You Need to Know
Commercial trucking insurance is a policy that explicitly covers risks or liabilities commonly found in the trucking industry. This type of policy can include specific coverages, such as general liability insurance, property damage, or commercial auto insurance.
However, your options may be limited depending on several factors. Much like cargo insurance, it’s crucial to speak to a trusted insurance provider and let them explain which policies are available to you.
The types of coverage could include the following:
1. Basic Coverage
This typically includes collisions, provided you’re at fault. It protects you against the cost of damages to the other vehicle(s) involved in the accident and damage to your vehicles.
Basic coverage also includes comprehensive insurance, which helps pay for repairs to your company-owned vehicles up to its maximum policy limit. It also covers other perils aside from collisions.
2. Specialized Coverage
Essentially, this coverage is for more specific scenarios in which your truck could be involved. For instance, the drivers transporting goods on behalf of customers need commercial auto insurance to cover third-party bodily injury or property damage.
Another example would be if your refrigerated truck (also known as a reefer) breaks down or the cooling component is faulty, and it causes damage to the goods while in transit. Then, you’ll need specific insurance to cover the costs and replacement of the damaged cargo.
3. Non-Trucking Coverage
This type of coverage applies to instances that are not directly related to cargo transportation, such as when it is parked or being driven for personal use.
Non-trucking coverage could include bobtail insurance, which applies when your company-owned truck is travelling without cargo after goods have been delivered, whether or not it is still pulling a trailer.
Another example of an inclusion is occupational accident insurance. This applies to a truck operator should an accidental death or dismemberment occur while on the job.
When Do You Need Commercial Trucking Insurance?
If you own a commercial trucking business designed to haul goods for long distances, you need insurance to secure your finances against risks or hazards. Commercial trucking insurance is also legally required if you transport goods across borders.
Let KASE Insurance Take Care of Your Insurance Needs
Don’t let the fear of risks or financial liabilities hinder you from expanding your business. KASE insurance, an award-winning insurance brokerage based in Toronto, provides customizable insurance packages that cater to your business’s unique needs.
Whether it’s freight forwarder insurance or cargo insurance, we are the trusted provider across the transportation industry because of our excellent customer-centric service and innovative solutions. When you purchase a policy from us, you can be assured you’re only getting the coverage you need.
Contact us today to learn more about our services, or call us to get a quick quote!
(416) 588 5273 
